Life insurance and coronavirus: Am I covered?

You take out life insurance to provide your loved ones with financial support should you unexpectedly die. So you will be reassured to know that life insurance policies do cover the novel coronavirus, known as COVID-19. 

If you die of the virus and have been truthful in your life insurance application form and kept up with payments, your named beneficiaries will receive a life insurance pay out. This can help with funeral costs, outstanding debts, the payment of a mortgage, or everyday family living expenses.

According to the Association of British Insurers (ABI), life insurers paid out more than £202 million in claims to support the families of those who died of COVID-19 during the first year of the coronavirus pandemic.

Life insurance policies pay out for death due to natural causes, which includes illnesses such as COVID-19 and its complications, as long as the policy is valid and the information provided was accurate to support valid claims.

When you apply for a life policy, the insurer will ask you about your current health and medical history. One of the specific questions will be whether you’re currently experiencing symptoms of coronavirus, or have recently tested positive for it. If either is the case, you won’t be able to take out a new policy right now. But once you make a full recovery, you can reapply.

Typically, insurers will have your application postponed if you currently have symptoms (such as a new or unexplained continuous cough, fever, or loss of smell and taste) or have tested positive within the last 30 days. They may also delay your application process if you’ve had direct contact with someone diagnosed with or suspected of having the virus and are in self-isolation. Once you've recovered and the postponement period (usually two weeks to three months, depending on the insurer) has passed, you can proceed with a new policy.

Testing positive for COVID-19 will not affect any life cover you already have in place, as long as it's covered.

As part of the underwriting application process, some life insurers are now asking if you’ve had COVID-19 before, especially if you were hospitalised. Having been severely ill may result in increased premiums or restrictions on your critical illness cover or life insurance policy.

For example, someone who required ICU support may be classed as a higher risk and could face additional scrutiny or a waiting period.

Yes, key workers can still access life cover during the pandemic. Some insurers, like Royal London and AIG, have shown more flexibility when covering key workers.

Finding coronavirus life insurance has been especially important for frontline healthcare workers, who are often in direct contact with COVID-19 patients. This concern led the British Medical Association (BMA) and the life insurance industry to issue a joint statement confirming healthcare workers should not face additional barriers during the application process during this difficult time.

As a result, healthcare workers' application forms will not be automatically deferred if they report exposure to COVID-19 while wearing PPE.

If you work in a foreign country, insurers may ask additional questions about your role and exposure to infectious diseases, including COVID-19.

Reports suggest that life insurers have become more cautious about offering life insurance to older or high-risk individuals who were asked to shield.

However, as the pandemic has subsided, it has become easier for vulnerable or older people to access life insurance, provided they are fully vaccinated. Companies such as Legal & General and Scottish Widows confirm that as long as applicants are vaccinated, they have the same chance of qualifying for life insurance as they did before the pandemic.

Having pre-existing conditions may also lead to exclusions or adjustments in critical illness cover, depending on the circumstances of insurer's assessment.

Long COVID refers to a range of post-viral symptoms that persist after the initial infection. These can include fatigue, breathlessness, or a continued loss of taste and smell. Research indicates a higher risk of death for up to a year after post-infection.

If you die from long-term complications due to COVID-19, your life insurance policy will still pay out in the event of death. The normal claims process applies, just as it would with any other qualifying medical condition.

However, long COVID isn’t typically considered a specified illness under a critical illness policy. These policies only pay for conditions explicitly listed in the policy documents. But if long COVID leads to a covered condition, such as kidney failure, you may be able to make a valid claim under your critical illness cover.

In 2021, as vaccines against COVID-19 were being rolled out across the world, rumours spread that receiving one of the jabs would void your life insurance policy. The Association of British Insurers (ABI) has reassured the public that receiving the vaccine doesn’t impact your life insurance, or any other life insurance claim.

With vaccines widely available, some insurers now ask about your current position regarding vaccination status during the application process. You must answer truthfully, just like you would to any other health question.

If you’re young and healthy, being unvaccinated might not stop you from getting life insurance, although you may pay higher premiums. However, older or high-risk applicants may need to be vaccinated to be accepted.

For larger life insurance policies with high lump sum payouts, full vaccination might also be a requirement during the underwriting stage. For example, if you're applying for cover worth over £1 million, insurers may review your vaccination status as part of their risk assessment.